You ever look at those BMI tables and wonder “Am I really supposed to weigh that little?” Well, conversion rates are the same. Your conversion rate is dependent on a number of highly dependent variables….many of which are internal to your business.
What is Conversion Rate?
To level-set, we calculate e-commerce conversion rates in the following way:
Conversion rate = # successful conversions / # of unique website visitor sessions.
Example: 2,500 conversions / 100,000 unique website visitors in a month = 2.5% conversion rate
Different industries define conversions differently, but for e-commerce companies, the conversion is typically the completion of an online sale.
So what is a good conversion rate?
It depends; unless you are giving away free $100 bills, a 100% conversion rate is pretty much impossible……and even then, you probably won’t get a 100% conversion rate because you will have some visitors who believe the offer is too good to be true and abandon the conversion funnel out of distrust. According to conventional wisdom, a conversion rate of 2% – 5% is considered “good”, but the reality is that there is quite a large variation across industries and products (and the definition of what a conversion is). The following table highlights the variability across industries.
In truth, conversion rates vary widely across industries. For example, the conversion rate in AdWords for the Finance & Insurance industry is 7.19% on the search network, which is higher than the 2.70% average across all industries.
Comparing your current conversion rate (using historical data) versus the average in your industry can be helpful in assessing how successful your site or campaign is. Regardless of the average, your goal should be to improve your conversion rate (and hopefully beat the average while you’re at it!).
If you’re looking to increase your conversion rate, here are 3 questions to ask yourself:
1) What are you offering that is different from your competitors?
You can’t escape simple economics: the universal law of supply and demand will have a large impact on your conversion rate. If your product or service is innovative, offers something new to your customers and is priced attractively, consequently the demand for it and your conversion rate will be higher.
Improving your conversion rate may involve something as simple as changing your offer to something that would better meet the needs of your customers. Or it may involve providing a more specialized product or service that your competitors are not offering. Even a slight differentiation from the mass market can yield improvements in your conversion rate.
You may want to test out different iterations of your product or service to see what best appeals to your customer base.
2) How easy is it for customers to engage with your business?
There is nothing more frustrating and off-putting for a customer than a bad user experience. Assess your landing page and other pages on your website for barriers to conversion. It could be a long and tedious registration form, or having the customer click on two other links before getting to your purchase page.
Finding the best flow to convert your prospects into customers can make a huge difference to your conversion rate. Remove those barriers and make it easier for them to engage with your business.
3) When was the last time you changed your landing page?
If you’ve found that your conversion rate has remained constant for some time, one of the first things you can do is change your landing page.
Perhaps your landing page hasn’t been fully optimized. Or consider tweaking the sales copy to help drive prospects to make that purchase. Maybe offering a limited-time special could persuade those who were on the fence to finally engage with your business.
Constantly test your landing pages to see what resonates with your customer base and find out which iteration yields the best conversion rate.
THE BOTTOM LINE
Finding out the average conversion rate for your industry is a good starting point as a benchmark. But settling for average is not enough. Leverage one of the above 3 factors to increase your conversion rate.
If you’re looking for a fresh perspective and customized advice on how to improve your conversion rate, get in touch with our team at Accorin now!